A report by CARE, backed by a legal opinion from a QC, says that the bill will make it impossible for churches and faith-based charities to insist that their senior staff lead lives in accordance with organisations' religious beliefs.

The charity said that under the bill, which will be considered by the House of Lords tomorrow, it would be illegal for a Christian charity to sack a senior manager for adultery or being openly gay. The same rules would apply to Muslim and Jewish churches and charities. But the biggest showdown is likely to be between the government and Britain's 4.3 million Catholics over the church's tradition of an all-male, celibate priesthood.

CARE's report, A Little Bit Against Discrimination?, warns that the bill's proposals are a serious threat to religious liberty in Britain.

John Bowers QC said that the bill could make it unlawful for a church to require a priest to be male and celibate.

Report author Daniel Boucher, said: "The Equality Bill is a direct assault on the freedom of all faith-based organisations, from churches to charities. This bill will make it unlawful for those organisations to employ people who are committed to a particular set of religious beliefs.

"This legislation must be revised to recognise our plural society. It must recognise that there are many people in our country who have deeply held religious views and convictions, rather than trying to impose some . . . Stalinistic version of society where there is only ever one view that is right, the government's."